Inside Business: Building trust in the internet

ELECTRONIC commerce is repeatedly hailed as a revolution in business, most critically - so the gurus keep telling us - because it reduces the importance of size.

On the internet, they say, a small start-up can compete far more effectively with a well-known giant than it can in conventional conditions. After all, just look at how Amazon.com has taken on the established book trade.

But one of the key hurdles is concern about security. Consumers are worried that because they have often never physically met the people with whom they are expected to do business they have difficulty in assessing their bona fides. Equally, those operating websites are concerned that their trademarks and other intellectual property are vulnerable to abuse.

However, two events of the past week could go some way to allying such fears. First, the accountancy profession has developed a seal of approval.

The WebTrust service was developed in the US and Canada and has just been licensed for use here.

Chris Howard, who is overseeing it in England, sees the project, one of several being planned in the electronic commerce arena, as a natural extension of the profession's provision of what are now called "assurance services".

The seal is paid for by the website operators and a check to ensure that it meets certain standards - in terms of such areas as freedom from viruses, protection of confidential information and money-back guarantees where the customer is not satisfied - is carried out a regular intervals. Other sites are also checked to ensure that they are not carrying unauthorised seals.

Trademarks like the seal of approval are the concern of IP Warehouse. IP Warehouse is a Florida-based business set up by two lawyers, who had previously been computer engineers, with the intention of helping lawyers carry out research over the internet. Describing their operation as an "information brokerage", Frank Cona and Michael Palage quickly saw a need to help clients protect what were often substantial intellectual property assets on the net.

Key to this service is a software technology the business has developed under the name IP DragNet. This allows for a comprehensive search of the internet for infringements of IP rights.

Already in operation in the US, the package is being made available to UK clients - chiefly law firms and the legal departments of large companies - now as a result of the acquisition of IP Warehouse by Compulink Information eXchange (CIX), which claims to be the UK's longest-established online service provider.

Graham Davies, CIX's sales and marketing director, said that the deal announced last week formed a crucial part of the company's strategy. With preservation of intangible assets set to be a key issue of the digital business age, he believed IP Warehouse was providing a valuable service.